Will debt deal hurt health industry?

Last year, health care industry groups gave President Barack Obama’s reform plan the support it needed to become law. Now, those same groups are sweating over what might happen in the debt ceiling talks — because their fortunes might be about to change.

Critics of the reform often attack it as a collection of “backroom health care deals,” and Democrats did have an easier time passing it because powerful groups — like hospitals and the drug industry — endorsed the legislation, or at least agreed to hold their fire. Some of them did get rewarded for their help, by being spared from deeper cuts or other legislation they’ve opposed for years.

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But no “deal” lasts forever, and now the groups that supported the reform law are keeping a nervous eye on what health care savings might become part of an agreement to raise the debt ceiling. Obama and congressional Democrats will be under pressure to show they’re really willing to “reduce the cost of health care spending and Medicare and Medicaid in the out-years,” as Obama put it at his June 29 press conference.

And the easiest way to do that without cutting benefits — which the Democrats say they don’t want to do — is to wring savings out of the different industry groups, especially if they got off easy in the health care law.

If that happens, the groups might not be able to count on Republicans to defend them — because they supported the health care law.

Here’s a guide to the main health care industry groups and what’s at stake for them:

Hospitals. They’re running an advertising campaign that raises the alarms about possible cuts in Medicare and Medicaid payments that could be part of a deficit reduction deal. “Cutting Medicare and Medicaid payments to hospitals could overload emergency rooms, shut down trauma units and reduce patient access to the latest treatments,” they warn in the ads by the Coalition to Protect America’s Health Care, a group formed to run advertising campaigns for hospitals.

They may have reason to be worried. During the health reform debate, three major hospital groups — the American Hospital Association, the Catholic Health Association of the United States and the Federation of American Hospitals — agreed to accept $155 billion in payment cuts over 10 years. They accepted the cuts because the law promised to expand coverage so much that the hospitals wouldn’t have to provide so much uncompensated care to uninsured people.

They also got a tradeoff, though. The law makes hospitals safe from any more payment cuts from the Independent Payment Advisory Board — the new panel that’s supposed to recommend more ways to trim Medicare spending — before 2020. That carve-out may be increasingly hard for Democrats to defend as they look for more savings — especially since Obama’s bipartisan deficit reduction commission, led by Alan Simpson and Erskine Bowles, said hospitals should lose that exemption.

And even if a debt ceiling agreement leaves the exemption alone — since Republicans want to repeal the whole board anyway — a separate round of Medicare and Medicaid payment cuts is still possible. That’s why hospital officials are reminding Congress that they already accepted a round of cuts in health reform. “The AHA has already made significant commitments in reducing health care costs over the next 10 years and as such, hospital care cannot be reduced further,” Thomas F. Zenty III, chairman of the Coalition to Protect America’s Health Care, said in a statement.